Good news for home owners, most fixed term specials have dropped lately. The graph below includes specials advertised at various lenders over the past three months and paints a comforting picture. With our central bank having raised the official cash rate twice it is nice to know that there are some long term solutions at affordable levels.
Haggling a good rate discount for our existing clients (who are re fixing) has been easier lately, with banks focused on retaining market share. With competition on cash backs reaching new highs banks have introduced new conditions to safe guard against clients moving too quickly. A couple of banks are now stipulating that cash backs are to be paid back if a client clears the debt in the first two years (through swapping banks etc).
The longer term fixed rates(4 & 5 years) are starting to look very attractive for anyone who feels that rates are likely to hit the 8% mark in the next couple of years. Splitting your home loan into various fixed terms can be a good way to hedge your bets. Although changing banks can become costly or more complicated if there is always some of your mortgage on a fixed term.
